IFC Anchors Armenia’s First Sustainability-Linked Bonds, Boosting Digital Connectivity

·       Country’s first sustainability-linked bonds in domestic capital debt markets to support leading mobile and fixed broadband operator 

·       Proceeds will fund 4G+ and high-speed fiber optic network expansion, enabling faster, better services

·       300,000 additional mobile data customers to access 4G+ mobile services and 90,000 more homes connected to internet by 2029

Yerevan, Armenia, December 17, 2024—IFC is anchoring a landmark $75 million sustainability-linked bond issuance by Team Telecom Armenia with a $13.5 million participation to boost digital infrastructure in Armenia. The project—the country’s first such bonds—aims to deliver faster, higher-quality mobile and fixed internet services to thousands of homes and customers.

Armenia faces a number of infrastructure and connectivity challenges, including slower mobile and fixed broadband speeds compared to regional averages. Connectivity is particularly limited in rural areas and among lower income groups, with 41 percent of the poor adult population lacking quality fixed broadband services, hindering their access to vital information, economic opportunities, and essential services. Addressing these gaps requires investments estimated at up to $600 million.

The bonds, arranged by Ameriabank, set to be listed on the Armenia Stock Exchange, will finance critical expansion projects for Team Telecom Armenia, including the rollout of 4G+ and fiber-to-the-home networks. The company plans to extend coverage to an additional 300,000 mobile data customers and connect 90,000 more homes to high-speed internet by 2029. It will particularly benefit underserved rural areas, where the company’s 4G+ coverage will increase from 74 percent to 96 percent, and fiber-to-the-home penetration will expand from 14 percent to 35 percent.

Hayk Yesayan, General Director of Team Telecom Armenia, said: “This bond issuance marks a pivotal step in modernizing Armenia’s telecommunications landscape in advancing toward a responsible, sustainable digital future. It is both an investment opportunity and a means to support the country’s telecom sector development.”

Sustainability-linked bonds are funding tools tied to a company’s sustainability goals. For example, a company might commit to lowering emissions or using renewable energy and earn a reduced interest rate for meeting targets. If these targets are missed, the interest rate may be increased.

Under the bond’s innovative sustainability structure, Team Telecom Armenia will be incentivized to reduce its greenhouse gas emissions by 20 percent by October 1, 2027, and by 40 percent by November 1, 2029, versus its 2023 baseline. In addition, bond proceeds will refinance the company’s existing loans to enable it to continue its investment program. IFC will also support the company’s efforts to reduce gender gaps through a gender assessment, develop a gender equality policy, and implement workshops to increase its ratio of female managers.

"IFC’s investment backs Team Telecom Armenia’s efforts to bring faster, better internet services to homes and communities across the country. As the country’s first sustainability-linked bond issuance, it also sets a strong example for other companies, encouraging them to pursue similar financing options that align business growth with environmental and social responsibility,” said Ivana Fernandes Duarte, IFC's Regional Manager for the South Caucasus.

The Asian Development Bank, European Bank for Reconstruction and Development Bank, and Proparco are also participating in the bond issuance.

This bond issuance marks another milestone in IFC’s partnership with Team Telecom Armenia, which began in 2022 when IFC provided a loan to support the company’s capital investment plan. IFC’s investment is aligned with the World Bank Group’s strategic priorities in Armenia, including supporting export-enabling sectors, such as information and communications technologies, and enhancing access to reliable infrastructure.

IFC is a leader in the telecoms, media, and technology sector in emerging markets. Learn more here.